Smart meters—small, electronic devices that track and record energy consumption, and communicate information back to the electrical utility—can reduce energy use by empowering consumers with the ability to monitor energy use and make better choices. Smart meters are an upgrade to outdated analog meters because they automatically record information in real time, rather than requiring someone to manually record and transmit the collected data.

There are significant advantages to smart meters, both for utility companies and for energy consumers. Smart meters record electricity usage and provide real-time data that can help balance electricity usage while reducing the number of blackouts. They eliminate the need for cumbersome monthly meter readings. Smart meters also can enable dynamic pricing, meaning they can lower or raise the price of electricity in response to demand. In addition to enabling optimization of electricity distribution and reducing power outages and grid failures, smart meters can give consumers better and more detailed reports on energy use, and empower consumers to change their energy habits to reduce energy costs.